(Yicai Global) Sept. 2 -- Bank of Nanjing dismissed a report that it had been forced to close its Hangzhou branch after depositors supposedly rushed to make withdrawals, saying the branch is operating normally.

News on social media platforms this morning said Bank of Nanjing's Zhejiang branch was in trouble and that "the bank has closed and depositors can't withdraw their money." Photos showed people gathered in front of a building with the bank’s logo.

A local source told Yicai Global that the photos were taken at the Binjiang Science and Technology sub-branch of the Bank of Nanjing’s Hangzhou branch. A staffer at the sub-branch said the bank had restored normal operations, and that withdrawals and other services were being offered and had not been affected by the rumor.

“I heard from nearby merchants that about 30 to 40 people had gathered outside the bank in the morning, as they were worried that large deposits of more than CNY500,000 (USD72,400) could not be taken out,” the local source said. “Later, the police persuaded them to leave.”

The incident comes in the wake of fraud at some rural banks in Henan province. As Bank of Nanjing used to act as a settlement agent for lenders in Henan, there have been market concerns about whether it would be caught up in the case.

Bank of Nanjing, whose largest shareholder is BNP Paribas, had earlier issued a statement pointing out that it only acted as a clearing channel for funds and did not bear any risk when acting on behalf of the Henan banks.

The findings of the latest investigation report released by Henan’s financial regulator last week said Henan New Wealth Group manipulated five rural banks in Henan and Anhui province to illegally raise public funds through internal and external collusion, using third-party platforms and money brokers. That resulted in the banks being unable to release depositors' funds.

The police have arrested 234 suspects so far in relation to the case.

Editors: Tang Shihua, Tom Litting